Daily Forex News by XtreamForex.com

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EUR/USD Hits Three-Week Low Around 1.1030 Amid Strengthening USD

The EUR/USD pair has seen selling pressure for the fifth consecutive day, dipping to a fresh three-week low near the 1.1030 mark during Thursday’s Asian session. This bearish momentum is driven by broad US Dollar (USD) strength, pushing the pair below the 50-day Simple Moving Average (SMA).

A stronger-than-expected ADP employment report and a robust US JOLTS Job Openings survey have reinforced views of a resilient US labor market. Coupled with Federal Reserve (Fed) Chair Jerome Powell’s hawkish comments earlier this week, expectations for a significant rate cut at the November FOMC meeting have cooled. Additionally, the growing geopolitical risk of escalating conflict in the Middle East has boosted demand for the safe-haven USD, helping it recover from its lowest level since July 2023 and reach a three-week high. This USD strength has continued to weigh heavily on the EUR/USD pair.

Further weakening the euro is the increased likelihood that the European Central Bank (ECB) will lower interest rates in October. This follows Eurozone inflation data showing a decline to 1.8% in September, below the ECB’s 2% target. ECB Governing Council member Martins Kazaks also highlighted the rising risks to the economy and stressed the importance of cautious monetary adjustments. This adds to the bearish sentiment surrounding EUR/USD, which has seen a sharp pullback from its 19-month peak.

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EUR/USD Hovers Near Mid-August Lows, Remains Vulnerable Around 1.0975

The EUR/USD pair starts the week on a subdued note, consolidating last week’s sharp losses, which brought it to its lowest level since mid-August following strong US employment data on Friday. The pair is currently trading around the 1.0975 level, looking vulnerable to further declines after pulling back from a 14-month high, just above 1.1200.

The US Dollar (USD) remains strong, hovering near a seven-week high, as traders reduce expectations of a significant interest rate cut by the Federal Reserve (Fed) in November. This shift follows unexpectedly robust US jobs data, which showed 254,000 jobs added in September, far surpassing expectations. Additionally, the Unemployment Rate dropped unexpectedly to 4.1%. These figures point to a resilient US labor market, and stronger-than-expected wage growth has reignited inflation concerns, dampening hopes for aggressive rate cuts by the Fed.

Currently, the market is pricing in a 95% probability that the Fed will reduce interest rates by 25 basis points at the conclusion of its two-day policy meeting on November 7. Meanwhile, geopolitical tensions in the Middle East have further supported the USD Index (DXY), which tracks the dollar against a basket of currencies, marking its best weekly performance since September 2022. In contrast, the euro is weighed down by expectations that the European Central Bank (ECB) will cut rates in October due to slowing inflation and economic growth.

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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

The USD/CHF pair is trading higher, hovering around 0.8575 during early European trading on Wednesday. This strength comes from a firmer US Dollar (USD), supported by fading expectations of aggressive rate cuts by the Federal Reserve (Fed). Investors are now focused on the release of the Federal Open Market Committee (FOMC) Minutes later today.

Last Friday’s stronger-than-expected jobs report boosted the Greenback, prompting markets to scale back their expectations for significant interest rate cuts. Boston Fed President Susan Collins noted that, as inflation trends soften, further rate cuts are likely. On the other hand, Atlanta Fed President Raphael Bostic emphasized that the labor market remains resilient, and while inflation is improving, price levels have not yet reached target goals.

As the week progresses, attention will shift to Thursday’s US Consumer Price Index (CPI) inflation report, which could provide further insight into the Fed’s future rate decisions. The headline CPI is anticipated to increase by 2.3% year-on-year (YoY) in September, while core CPI is projected to rise by 3.2% YoY. Any signs of easing inflation could weigh on the USD and potentially limit gains for the USD/CHF pair.

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GBP/USD Tests 1.3000, Faces Challenges Amid BoE Dovish Outlook

The GBP/USD pair moved closer to the 1.3000 mark during Wednesday’s Asian session, though the British Pound (GBP) encountered resistance due to weaker UK economic data. Falling consumer and producer inflation, alongside disappointing labor market figures, have raised market expectations that the Bank of England (BoE) might cut interest rates by 25 basis points in November, with another quarter-point reduction anticipated in December.

On Tuesday, BoE Governor Andrew Bailey stressed the need for the central bank to improve oversight of the opaque non-banking financial sector. Speaking at a Bloomberg event in New York, Bailey stated, “We are nearing a shift from rule-making to surveillance” to better monitor financial activities outside traditional banking.

Additionally, BoE Deputy Governor Sarah Breeden is set to participate in a panel discussion on financial regulation hosted by the Institute of International Finance (IIF) in Washington on Wednesday.

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EUR/USD Rebounds from Multi-Month Low, Eyes 1.0800 Ahead of Flash PMIs

The EUR/USD pair is showing signs of recovery during Thursday’s Asian session, breaking a three-day losing streak that saw it hit its lowest level since early July, near the 1.0760 region. Spot prices have edged closer to the 1.0800 level in recent hours, buoyed by a slight pullback in the US Dollar (USD). However, bullish traders should exercise caution due to underlying market conditions.

A retreat in US Treasury yields from a three-month high has led to some profit-taking on the USD, following its recent rally to levels last seen in late July. Still, the expectation that the Federal Reserve (Fed) may implement only modest rate cuts, coupled with investor caution ahead of the November 5 US Presidential election, could provide support for the USD as a safe-haven currency. Additionally, dovish signals from the European Central Bank (ECB) are likely to limit any significant upward movement for the EUR/USD pair.

Eurozone inflation fell to 1.7% in September, dipping below the ECB’s 2% target for the first time since June 2021. This reinforces the ECB’s view that inflationary pressures are easing and supports the likelihood of further policy easing. On Wednesday, ECB official Mario Centeno noted that downside risks are prominent for both growth and inflation, hinting that a 50 basis point rate cut in December is under consideration. Similarly, ECB’s Bostjan Vasle highlighted data suggesting potential delays in the expected recovery in growth.

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USD/CAD Nears Two-Month Highs at 1.3850 as Traders Turn Cautious Before US Election

The USD/CAD pair holds steady with two consecutive days of gains, trading around 1.3850 in Friday’s Asian session. This level sits close to Thursday’s two-month high of 1.3868. The US Dollar’s strength underpins the pair’s resilience, fueled by growing expectations that the Federal Reserve may adopt a less aggressive stance on interest rate cuts.

Speculation surrounding the US presidential election in November is also boosting the Dollar, with former President Donald Trump gaining attention. His inflation-focused policies, including higher tariffs and tax cuts, are thought to be adding upward pressure on the Greenback.

During a rally in Las Vegas on Thursday, Trump emphasized his administration’s commitment to economic growth for all Americans, including African American, Hispanic, and Asian American communities, as reported by Reuters. Meanwhile, in Georgia, Vice President Kamala Harris held a rally with the support of prominent figures, including Bruce Springsteen, Tyler Perry, and former President Barack Obama, drawing thousands in the battleground state.

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USD/CHF Stays Below 0.8650 as Market Caution Intensifies Ahead of US Presidential Election

USD/CHF remains steady around 0.8640 in Asian trading hours on Tuesday, following losses in the previous session. The US Dollar (USD) is holding its ground as market participants exercise caution amid uncertainties surrounding the upcoming US presidential election. Additionally, rising US Treasury yields provide further support for the Greenback.

Opinion polls indicate a tight race between former President Donald Trump and Vice President Kamala Harris. The outcome could remain undetermined for days after Tuesday’s vote, with both Trump and Harris expressing confidence while campaigning in Pennsylvania on the final day of this highly contested race.

The US Dollar Index (DXY), which tracks the USD against six major currencies, is trading around 103.90, with 2-year and 10-year US Treasury yields at 4.16% and 4.29%, respectively, as of this writing.

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EUR/USD Hovering Near 1.0750 with Downward Pressure Amid Political Shifts in the U.S

The EUR/USD pair remains around 1.0740 during the Asian session on Thursday, after experiencing a 2% decline in the previous session. The pair appears to be under downside pressure as the U.S. Dollar gains traction, potentially benefiting from renewed interest in “Trump trades” following the Republican Party’s victory in the U.S. elections.

The Republican victory suggests a potential shift in policy, with Donald Trump’s party likely to take control of both congressional chambers. This would mark a return to their agenda of tax cuts, deregulation, and border security initiatives, priorities not seen in the past eight years. Early legislative goals include extending the 2017 tax cuts, securing funds for the U.S.-Mexico border wall, cutting unspent Democratic-allocated funds, dismantling the Department of Education, and curtailing the authority of the Consumer Financial Protection Bureau, as reported by Reuters.

Despite this, the U.S. Dollar Index (DXY), which measures the dollar against a basket of six major currencies, has slightly declined from a recent four-month high of 105.44, now trading near 104.90. This comes amid a pullback in U.S. Treasury yields after reaching recent highs of 4.31% and 4.47%.

Markets widely anticipate a 25 basis-point rate cut by the Federal Reserve at its November meeting, with the CME FedWatch Tool indicating a 98.1% probability for this outcome. The move reflects market consensus for a modest reduction in interest rates this month.

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USD/CHF Rises Above 0.8700 on Renewed US Dollar Demand

The USD/CHF pair edges up to approximately 0.8730 in early European trading on Friday, supported by a fresh wave of demand for the US Dollar. Market participants are awaiting the release of the preliminary US Michigan Consumer Sentiment data for November, along with remarks from Federal Reserve Governor Michelle Bowman later in the day.

On Thursday, the Federal Reserve cut borrowing costs by 0.25 basis points, reducing the federal funds rate to a range of 4.5%–4.75%, down from the previous 4.75%–5% range. This was a more modest reduction compared to the September cut. During the press conference, Fed Chair Jerome Powell stated that the US economy remains resilient and has shown meaningful progress toward the Fed’s long-term goals over the past two years.

Powell emphasized the importance of carefully calibrating interest rate adjustments to avoid any undue strain on the labor market. He noted that the Fed would continue to monitor economic data to guide the “pace and destination” of future rate changes. Meanwhile, the US Dollar has drawn some support as investors expect that economic policies may boost growth and inflation, potentially slowing the pace of rate cuts.

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EUR/USD Hovers Near 1.0600 as US Dollar Retreats on Profit-Taking

The EUR/USD pair remains steady with a positive bias around the 1.0600 mark during Tuesday’s Asian session. The pair’s upward momentum appears supported by a softer US Dollar (USD), which is undergoing profit-taking after its recent rally.

Despite the USD’s pullback, its downside remains limited due to hawkish comments from Federal Reserve (Fed) Chair Jerome Powell. Powell emphasized the economy’s resilience, a robust labor market, and persistent inflation pressures, cautioning that the Fed sees no urgency to cut interest rates. Market participants are now awaiting further insights from Fed officials later this week regarding the future direction of monetary policy.

The USD could also regain strength as investors expect the incoming Trump administration to implement tax cuts and higher tariffs—policies that may drive inflation, potentially slowing the pace of Fed rate cuts.

On the European side, European Central Bank (ECB) President Christine Lagarde highlighted structural challenges in the region. Speaking on Monday, Lagarde called for a consolidation of resources in areas such as defense and climate, citing stagnating productivity growth and increasing global fragmentation into competitive blocs. 

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USD/CAD Holds Near One-Week Low, Trades Range-Bound Above Mid-1.3900s

The USD/CAD pair has found support near the mid-1.3900s, marking a one-week low during Wednesday’s Asian session. However, the pair struggles to gain upward momentum, pausing this week’s pullback from its highest level since May 2020. Mixed fundamental signals keep bullish traders cautious.

Canadian Inflation and BoC Outlook
Canada’s annual inflation rate rose more than expected to 2.0% in October, prompting a recalibration of market expectations for a significant rate cut by the Bank of Canada (BoC) in December. This has provided some support for the Canadian Dollar (CAD), offsetting pressure on the USD/CAD pair. However, subdued crude oil prices continue to cap the Loonie’s gains, limiting its appreciation.

Crude Oil Dynamics
While fears of supply disruptions due to the Russia-Ukraine conflict persist, crude oil prices remain constrained by signs of increased U.S. stockpiles. The American Petroleum Institute (API) reported a larger-than-expected build of 4.75 million barrels in U.S. inventories last week, indicating ample supply and dampening oil’s recent recovery from a two-month low.

U.S. Dollar and Treasury Yields
On the U.S. side, a resurgence in dip-buying for the U.S. Dollar (USD) offers support to the USD/CAD pair. Expectations that U.S. fiscal policies under President-elect Donald Trump could stimulate economic growth and fuel inflation have bolstered U.S. Treasury yields, enhancing USD demand. This dynamic limits the pair’s downside potential.

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EUR/USD Slips Below 1.0550 Amid Awaited ECB Lagarde Speech and US PMI Data

The EUR/USD pair extended its decline to around 1.0530 during early Asian trading on Monday, pressured by a strengthening US Dollar (USD). Traders are focusing on key events scheduled for later in the day, including European Central Bank (ECB) President Christine Lagarde’s speech and the release of the US ISM Manufacturing PMI.

In the Eurozone, November’s Harmonized Index of Consumer Prices (HICP) rose to 2.3% year-over-year, up from October’s 2.0%, aligning with market expectations and surpassing the ECB’s 2.0% target. Core HICP also edged higher, rising to 2.8% YoY from 2.7% in the prior reading, meeting forecasts.

Markets are pricing in a 25 basis-point (bps) rate cut by the ECB in December, marking the central bank’s fourth reduction of the year. However, expectations for a larger 50 bps cut have waned, supported by marginal improvements in the Eurozone’s subdued growth outlook. Anticipation of rate cuts continues to weigh on the Euro (EUR).

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GBP/USD Price Forecast: Bearish Bias Remains Unchanged Below 1.2700

The GBP/USD pair remains in positive territory for the second consecutive day, trading near 1.2690 during Wednesday’s early European session. However, the upside potential appears limited as expectations of a less aggressive interest rate cut by the US Federal Reserve and concerns over President-elect Donald Trump’s tariff policies lend support to the US Dollar. Investors are closely watching Federal Reserve Chair Jerome Powell’s speech for insights into the interest rate outlook.

From a technical perspective, the bearish bias for GBP/USD persists, with the pair holding below the critical 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI), hovering below the midline at 45.35, signals potential further downside.

Key support is located at the psychological level of 1.2600. A break below this level could expose the next target at 1.2467, the lower limit of the Bollinger Band, with further declines potentially testing 1.2331, the low from April 23.

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EUR/USD Gains Momentum Ahead of Key NFP Data Release

The EUR/USD pair climbed on Thursday, rising by 0.7% to approach the 1.0600 level. The move comes as better-than-expected European retail sales data for October temporarily buoyed sentiment, despite a monthly decline. Meanwhile, expectations of an ECB rate cut and a risk-on market mood ahead of Friday’s US Nonfarm Payrolls (NFP) report are keeping the currency pair in focus.

ECB Poised for Another Rate Cut Amid Mixed Economic Signals
October retail sales across the EU increased by 1.9% YoY, beating the 1.7% forecast, though still sharply lower than September’s revised 3.0%. This decline in broader economic activity has led to rising expectations of more aggressive rate cuts from the European Central Bank (ECB). ECB President Christine Lagarde reiterated the bank’s commitment to fostering growth, projecting that inflation would ease again by 2025 despite a near-term bump in Q4.

Markets are pricing in a 25-bps rate cut from the ECB next week. Political turmoil in France, including President Emmanuel Macron surviving a no-confidence vote and planning to appoint a new Prime Minister, has been largely brushed aside by investors.

US Labor Market Data Adds Complexity to NFP Expectations
In the US, Initial Jobless Claims rose to 224,000 for the week ending November 29, the highest in six weeks, missing expectations of 215,000. Challenger Job Cuts also increased to 57,727 in November, signaling potential cracks in the labor market. However, these figures are seen as less significant compared to the looming NFP data, which is expected to show a strong rebound of 200,000 job additions in November following October’s hurricane- and strike-impacted figure of 12,000.

EUR/USD Technical Analysis
Current Outlook: The EUR/USD daily chart reflects a consolidation phase following a substantial downtrend that started in mid-July. After peaking near 1.1270, the pair experienced a steep decline, breaking below major support levels, including the 200-day EMA (1.0834) and the critical psychological level of 1.0600.

Recent Action: The pair recently rebounded from a November low of 1.0450, showing resilience around the 1.0588 level. Thursday’s bullish daily candle indicates growing momentum, with the pair breaking above the short-term resistance at 1.0550.

Upside Potential: A sustained move above 1.0600 could set the stage for further gains, potentially targeting the 50-day EMA at 1.0715. Breaking this level could validate a broader trend reversal and pave the way for a test of the 200-day EMA at 1.0834.

Downside Risks: On the downside, the MACD remains negative but shows signs of weakening bearish momentum. A failure to maintain the current rally could see EUR/USD revisiting support at 1.0500, with the critical 1.0450 low serving as a key threshold for bullish traders.

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GBP/USD Rebounds as US Dollar Weakens Amid Rising Fed Rate Cut Expectations

GBP/USD has recovered losses from the previous session, trading near 1.2770 during Thursday’s Asian session. The pair gains strength as the US Dollar (USD) retreats from a four-day winning streak, despite support from elevated US Treasury yields.

The US Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 106.50. Meanwhile, yields on US 2-year and 10-year Treasury bonds are reported at 4.16% and 4.28%, respectively.

The USD faces headwinds as the latest US Consumer Price Index (CPI) data does little to deter speculation of a Federal Reserve (Fed) rate cut in December. According to the CME FedWatch Tool, there is nearly a 99% probability of a 25-basis-point rate reduction during the Fed’s December 18 meeting. Market participants now turn their attention to the US November Producer Price Index (PPI), set for release later on Thursday, for further direction.

In November, the US CPI rose to 2.7% year-over-year, up from 2.6% in October, aligning with expectations. Month-over-month, headline CPI posted a 0.3% increase, matching market consensus. Core CPI, excluding food and energy, advanced 3.3% YoY and 0.3% MoM, both in line with forecasts.

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